Oil drives April exports to highest in 4 years; imports up 10%, trade deficit at 3-month high

NEW DELHI: Higher petroleum prices propelled India’s exports to $43.6 billion, the highest monthly level in over four years, showing a 13.8% growth, which is fastest in five months. Imports rose at a more moderate pace of 9.9% to $71.9 billion, resulting in a trade deficit of 28.3 billion, a three-month high.

Oil product exports jumped 34.7% to $9.6 billion in April, next only to engineering ($10.3 billion). Diesel, aviation fuel and petrol exports had shrunk nearly 15% to under $54 billion last year as global prices remained muted.

In April, among the top export items, only electronics clocked a faster growth, rising over 40% to $5.2 billion. The change in fortunes due to higher international prices also meant that after a long time the growth in nonoil exports of 9% in April was slower than the overall pace of expansion.

On the import side, import of “petroleum, crude and products” declined 10% to $18.6 billion, despite a sharp rise in the cost of crude. The fall probably was accounted for by lower LPG imports. The $2 billion decline in oil import bill was, however, more than offset by an 81.7% jump in gold imports to $5.6 billion in April, from $3.1 billion a year ago, while silver imports soared from $160 million to $411 million.

Commerce secretary Rajesh Agrawal said Indian exports had registered healthy exports, despite global headwinds.
The disruption in West Asia has, however, affected trade with the region, with oil and gas being the dominant item. Agrawal said exports to the region fell 28% to $4.2 billion in April, while imports dropped 31.6% to $10.5 billion.
Asked about the impact of depreciating rupee on exports, the secretary said: “Till now it has been showing a positive trajectory and the early signs from May also look at it being positive.” He added that higher oil prices will not impact export competitiveness as all countries were dealing with the issue and stated that Indian consumers and exporters have so far been largely insulated from its impact due to limited or no pass through.

Agrawal also said that the commerce department will work towards pushing the overall exports, including services, to $1 trillion in the current financial year, nearly 16% higher than last year’s level of $863 billion.

The Rs 25,060 crore export promotion mission and free trade agreements will help push the shipments this year. “New operational agreements will create opportunities for our exporters, which they are already working around to see how best we can leverage it. We are looking forward to the operationalisation of some of these FTAs in the next few months,” he said.

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